3 STOCKS I SAW ON TV: TSLA, INTC, K (April 19, 2016)
Every night we watch the same shows, right? Fast Money and Mad Money, and we want to use those ideas to grow our money. Well good trading takes more than pushing the buy button the next morning on the stocks you saw last night. I’m here to help you make money on these 3 stocks I saw on TV. We’re going to look at Tesla ( NASDAQ:TSLA ), Intel ( NASDAQ:INTC ), and Kellogg ( NYSE:K ).
First up Tesla ( NASDAQ:TSLA ). Consumer Reports issued a report today (which is what Consumer Reports does), essentially calling into question quality control at Elon Musk’s company. The SUV’s are not SUVing. The doors aren’t opening, stuff like that. This guy wasn’t particularly bullish on the quality of the cars. Consumer Reports, they’re not talking about the stock price, you’re just talking about the quality of the cars. So that could be a big deal for these guys, obviously. The stock was down 2.5 percent today. The challenge that I have here is,Tesla ( NASDAQ:TSLA ) gets down 2.5 percent a lot, and then it just starts moving higher again. You see this from time to time. I think Tesla ( NASDAQ:TSLA ) is a brutal stock to short. I know because I’ve tried, it hasn’t worked out too well for me. But it’s kind of tough to justify being long here either, particularly since the company reports earnings in a couple weeks. I think they report on May 4th, so I think this stock is just going to jostle around in this range a bit.
Here’s what I would suggest: If you’re a big Tesla ( NASDAQ:TSLA ) fan, I’m talking about the stock, I think you have a problem on your hands, because this stock could easily fall to 210.00. On the other hand, and that’s where the 50-day moving average is. On the other hand though, if you’re a Tesla bear, be careful because this stock could rocket up above to 290.00 and just keep on going. It’s seriously that kind of stock. The stock does not trade on fundamentals. That’s what I’m trying to tell you. Seriously, don’t even look at the fundamentals on Tesla ( NASDAQ:TSLA ), they’re horrible. Every time the company wants to do something it takes on more debt. Even though it said the last time it wouldn’t take on any more debt. Nobody cares. What I want you to do is focus on the stock price. Focus on the chart. Listen to this Consumer Report, because that really matters, if you’re going to buy a Tesla ( NASDAQ:TSLA ). But if you’re going to buy Tesla ( NASDAQ:TSLA ) stock, I say you just be careful because of this earnings number. It could be kind of brutal. And then you’ve got to wonder about forward guidance.
Okay, Intel ( NASDAQ:INTC ). They’re cutting 11 percent of their work force. Now the CEO said basically, “Look, we’re transitioning. We’re going to be powering the cloud.” That’s all well and good to say, that’s fine. Good for you. You’re going to power the cloud. I don’t think people particularly care. I saw Tim Seymour saying that the chart looked pretty compelling because the 50-day moving average was about to cross the 200-day moving average. I’m not moved, and here’s why: Because you could see the 50-day moving average crossed below the 200-day moving average here and that’s a bearish signal. Well, by the time it crossed over the stock was clear down here. It would have been nice to get that signal up to 35.00 as opposed to 30.00. So when a stock is chopping around like this. And make no mistake about it, this is a volatile, volatile stock. I don’t really care so much about moving averages. I just care about price levels and yield. And I will tell you this, honestly, this stock is going nowhere, and it’s going nowhere slowly. It pays a 3.3 percent dividend. But if you want to buy this stock at $31.00, that’s great! Because you will be able to buy it at $31.00 next week and next month and probably the month after that, if not cheaper. The stock is range-bound. It’s in jail. I don’t see any reason to be it’s cell mate.
Next, Kellogg ( NYSE:K ). Cramer likes Kellogg ( NYSE:K ). He did a big deal on it on Mad Money. I like this, I like the chart. The 200-day moving average or 40-week moving average is moving higher. The stock well above that. But you look at the 50-day moving average, that’s the red line here, this is the one that’s important. Here’s the deal, a couple things. First of all, I can draw this channel and say, “Well that’s a bearish wedge.” In other words, it still gets higher lows and higher highs, but they are converging. So at the end, ultimately they would meet and then something has got to give. Typically, in this scenario, the stock is going to trickle out like water at the end of a hose and that’s going to drift lower. So that’s one analysis. But here’s one that I think will help you more, and that is the highs.
Look at the highs, draw this, that doesn’t work because now this last high was higher, and this high even higher still. So we draw this line. Here’s the point, often times the first warning that you get about a stock that’s going to reverse, is not a break of support. That’s not what you get. You get a failure to establish resistance, to establish that channel as continued resistance. So I don’t want you to think so much about a breakdown here. Though certainly if the stock falls below the 50-day moving average that’s not a good thing and you’re going to want to exit. But if this stock does not maintain this trendline here that’s an early warning sign. Not necessarily of a reversal, but just of the end of an uptrend. And remember, an uptrend doesn’t have to reverse to a downtrend. They can just channel sideways for a while. A 2.5 percent yield isn’t really enough to move me to want to buy this stock that’s not moving higher. So watch these highs, I think they matter.
3 Stocks I Saw on TV